A 'Plausible' Showing after Bell Atlantic Corp. v. Twombly

Abstract

The United States Supreme Court's decision in Bell Atlantic Corp. v. Twombly is creating quite a stir. Suddenly gone is the famous loosey-goosey rule of Conley v. Gibson "that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Now a complaint must provide "enough facts to state a claim to relief that is plausible on its face." Decided in 2007, Bell Atlantic was cited in over 6,000 cases in just its first year.

Already being described as a landmark decision, Bell Atlantic nonetheless has lawyers and judges scratching their heads over the precise pleading standard to apply in its wake. As the Second Circuit (mildly) put it, "Considerable uncertainty concerning the standard for assessing the adequacy of pleadings has recently been created by the Supreme Court's decision in Bell Atlantic Corp. v. Twombly." Just what is a plausible "showing that the pleader is entitled to relief" under Rule 8(a)(2)?

I believe an answer lies in the 27-year-old decision of the Former Fifth Circuit in In re Plywood Antitrust Litigation. Plywood Antitrust requires, at a minimum, that "a complaint . . . contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory." Already used in more than half the circuits, this standard paraphrases advice found in Professors Wright and Miller's venerable Federal Practice and Procedure for nearly forty years. Properly applied, this "all . . . material elements" standard satisfies Bell Atlantic's "plausibility" requirement in all respects.

The Plywood Antitrust pleading standard works well after Bell Atlantic, first, because the Supreme Court referred to the standard, albeit parenthetically, with approval in Bell Atlantic. Second, the standard does much to harmonize the Federal Rules' goal of dispensing with pleading technicalities while still requiring enough general factual information about a pleader's claim to make the notice in "notice pleading" meaningful. Finally, and perhaps most importantly, it gives lawyers, litigants, and courts a standard they can actually use when drafting or assessing the sufficiency of pleadings.

Keywords: Bell Atlantic, Twombly, pleading, plausibility, notice pleading, Plywood Antitrust, Charles E. Clark, Fed. R. Civ. P. 8(a)(2), Rule 8(a)(2)

JEL Classification: K40, K41, K49